After experiencing extreme sell-offs, cryptocurrencies are hitting new lows. Various metrics signaled that Bitcoin hit bottom, suggesting a potential short-term recovery, which began in the past few hours. Currently, Bitcoin’s price is approaching $94,000; however, it’s too early to celebrate.
Strategic Partnerships of Nvidia, Microsoft, and Anthropic
The primary reasons for the market’s decline included debates about the overvaluation of AI companies. Gigantic companies like OpenAI, expected to be profitable by 2030-2028, were compelled to spend continuously. Meanwhile, trillion-dollar tech giants needed to bear these costs. Discussions on the sustainability of these expenditures intensified after OpenAI requested governmental assurances for its infrastructure investments.
The most anticipated event noted on Sunday and yesterday was the upcoming Nvidia earnings report, expected at 00:20 on Thursday. This report is arguably the year’s most significant as it might counter the narrative of tech companies being overvalued if it exceeds expectations. Many analysts maintain a positive outlook for this report.
Another reason behind the market’s rise today was the newly established strategic partnerships between Nvidia, Microsoft, and Anthropic.
The Rebound of Cryptocurrencies
The market recovery started during the U.S. market opening when three tech giants announced new strategic alliances, emphasizing their mutual investments. Anthropic, the company behind Claude, is already a representation of U.S. AI innovation alongside OpenAI. Today’s announcement includes a range of reciprocal investments.
- •Anthropic will purchase $30 billion worth of computing capacity from Azure.
- •Nvidia will invest $10 billion in Anthropic.
- •Microsoft will invest $5 billion in Anthropic.
- •Nvidia and Anthropic will collaborate on design and engineering.
- •A “deep technology partnership” will be established between Nvidia and Anthropic.
Therefore, the money flowing to Anthropic is effectively circulated back to its investors, who recover their investment by selling services, thus keeping the AI cycle going. Theoretically, eliminating cash transactions for direct exchanges might streamline their operations.
Whether AI companies can sustain this cycle until their products become profitable by 2030 is uncertain. However, for now, things appear to be on track. Should Nvidia’s report exceed expectations early Thursday, the rise in cryptocurrencies could become more permanent.